Agriculture Policy & Farm Bill Briefing Book
Congressional Research Service

Redistributed as a service of the National Library for the Environment

Agriculture and the Budget

Ralph M. Chite

The U.S. Department of Agriculture (USDA) carries out its widely varied responsibilities through approximately 30 separate internal agencies and offices staffed by some 100,000 employees. USDA is responsible for many activities outside of the agriculture budget function. Hence, spending for USDA is not synonymous with spending for farmers, nor with the agriculture appropriations bill, which includes funds for non-USDA programs, notably the Food and Drug Administration (FDA).

USDA gross outlays for FY1999 (the most recently completed fiscal year for which data are currently available) were $67.5 billion. The largest outlay within the Department, $33 billion, or just under one-half of total FY1999 outlays, was for its food and nutrition programs ­ primarily the food stamp program (the costliest of all USDA programs), various child nutrition programs, and the Women, Infants and Children (WIC) program. FY1999 gross outlays also include $23.6 billion, or just over one-third of total outlays, for farm and foreign agricultural services. Within this mission area of USDA are the programs funded through the Commodity Credit Corporation (e.g., commodity support programs, the conservation reserve program, and certain trade programs), crop insurance, farm loans, and foreign food aid programs. 

Another $4.7 billion (7%) was spent in FY1999 on an array of natural resource and environment programs, nearly three-fourths of which funded the Forest Service (which is funded through the Interior appropriations bill, and the only USDA agency not funded through the agriculture appropriations bill), and the balance for a number of conservation programs for farm producers. USDA programs for rural development ($2.5 billion in gross outlays for FY1999); research and education ($1.9 billion); marketing and regulatory activities ($818 million); meat and poultry inspection ($604 million); and departmental administrative offices and other activities ($362 million) account for most of the balance of USDA spending.

Mandatory vs. Discretionary Spending

Approximately three-fourths of total USDA spending is classified as mandatory, which by definition occurs outside the control of annual appropriations. Eligibility for mandatory programs is usually written into authorizing law, and any individual or entity that meets the eligibility requirements is entitled to the benefits authorized by the law. Currently accounting for the vast majority of USDA mandatory spending are the food stamp program (which accounts for nearly one-half of total USDA mandatory spending); child nutrition programs; the farm commodity price and income support programs; the federal crop insurance program; and the conservation reserve program (CRP).

Although they have mandatory status, the food and nutrition programs are funded by an annual appropriation based on projected spending needs. Supplemental appropriations generally are made if and when these estimates fall short of required spending. An annual appropriation is also made to reimburse the Commodity Credit Corporation for losses it incurs in financing the commodity support programs and the various other programs it finances.

Table 1. U.S. Department of Agriculture and Related Agencies Appropriations, FY1994 to FY2001(budget authority in billions of dollars)

  FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001
Discretionary $14.59 $13.29 $13.31 $13.05 $13.75 $13.69 $13.95 $15.04
Mandatory $56.25 $54.61 $49.78 $40.08 $35.80 $42.25 $61.95 $59.77
Total Budget Authority $70.84 $67.90 $63.09 $53.12 $49.55 $55.94 $75.90 $74.81

Notes: Includes regular annual appropriations for all of USDA (except the Forest Service), the Food and Drug Administration, and the Commodity Futures Trading Commission. Excludes all emergency supplemental appropriations. Budget authority is the authority given to commit funds of the Treasury. Congress provides budget authority through annual appropriations acts and legislation which authorizes direct spending. Budget authority differs from outlays (the term used elsewhere in this discussion); outlays represent cash disbursements from the Treasury.

Source: House Appropriations Committee.

The other 25% of the USDA budget is for discretionary programs, which are determined by funding in annual appropriations acts. Among the major discretionary programs within USDA that are funded by the annual agriculture appropriations act are its rural development programs, research and education programs, agricultural credit, the supplemental nutrition program for women, infants, and children (WIC), the Public Law (P.L.) 480 international food aid program, meat and poultry inspection, and food marketing and regulatory programs. FY2000 funding levels for all USDA discretionary programs (except for the Forest Service) is provided by the FY2000 agriculture appropriations act (P.L. 106-78).

In Congress

On February 28, 2001, the Bush Administration released its budget "blueprint" which outlined proposed broad 10-year spending levels beginning in FY2002. The Administration's blueprint did not directly address funding levels for USDA mandatory programs, such as the farm commodity support programs. However, it did recognize that additional funding might be required if current farm economic conditions caused by low farm commodity prices persist. The Administration's overall plan reserves a portion of future budget surpluses for a 10-year, multi-billion dollar contingency reserve fund, an unspecified portion of which could be used for additional farm spending, national security requirements, or other unforeseen spending needs. On April 9, 2001, the Administration presented its detailed budget request for all federal spending for FY2002, including USDA.

Meanwhile, Congress is expected to complete action this spring on a budget resolution for a multi-year period beginning in FY2002. The budget resolution, which does not require Presidential approval, provides a blueprint for all federal spending. The level of farm commodity spending allowed by the budget resolution for FY2002 and beyond likely will serve as the fiscal parameter for the agriculture committees as they begin work on the 2002 farm bill. As part of the budget process, each congressional authorizing committee submitted to the budget committees its recommendations for spending on programs under its jurisdiction. The agriculture committees did not request specific dollar amounts for additional farm assistance. They instead asked the budget committees to provide them with the flexibility they might need to provide ad hoc assistance this year and to make possible changes to authorized farm commodity support programs once they expire in 2002.

The House and Senate have completed action on their respective versions of the FY2002 budget resolution (H.Con.Res. 83). The two chambers took two distinctly different approaches to how they would address the funding needs of agricultural programs. These differences are expected to be resolved in conference committee after the spring recess.

The House version of the budget resolution was passed by a 222-205 vote on March 28, 2001. With respect to agriculture spending, the House-passed resolution concurs with the Administration proposal for the use of a reserve fund to finance future new farm spending needs. For the near term, Section 8 of H.Con.Res. 83, as passed by the House, allows the chairman of the House Budget Committee to increase allocations for farm spending in FY2001, if Congress passes legislation authorizing financial assistance to crop growers. For longer term farm spending needs, Section 6 allows the Budget Committee chairman to increase agricultural spending in FY2002 by July 25, 2001, if the House Agriculture Committee reports legislation reauthorizing the 1996 farm bill commodity title by July 11, 2001. A Stenholm amendment (H.Amdt. 19), which included a provision to specifically allocate $9 billion in additional emergency farm assistance in FY2001 and increase the agriculture baseline by $12 billion per year for four subsequent years (FY2002-2005), was defeated by a 204-221 vote.

The Senate passed its version of the resolution on April 6th, without committee markup. Several amendments were adopted on the Senate floor during the week-long debate. A Grassley amendment (S.Amdt. 174) that added $5 billion to farm commodity support spending for FY2001 and an additional $55 billion over the following 10 years (FY2002-2011) was adopted by a 51-49 vote. A Lincoln amendment (S.Amdt. 253) added $4 billion to FY2001 supplemental spending, which, when added to the Grassley amendment, would bring the total FY2001 additional spending to $9 billion, a level requested by many farm commodity groups for emergency FY2001 agricultural spending. A Johnson amendment (S.Amdt. 176), which would have increased farm commodity support spending by $88.6 billion over 10 years (as opposed to the $55 billion over 10 years adopted by the chamber), was defeated on the Senate floor by a 47-53 vote.

CRS Products

CRS Report RL30501, Appropriations for FY2001: U.S. Department of Agriculture and Related Agencies.
CRS Report RS20269, Emergency Funding for Agriculture: A Brief History of Congressional Action, FY1989-FY2001.

Page last updated April 9, 2001.

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